Memo

TITLE OF BILL: An act to amend the tax law, in relation to the metropolitan commuter transportation mobility tax rates on earnings from self-employment

PURPOSE:

This legislation would repeal the imposition of the metropolitan commuter transportation tax on earnings from self-employment.

SUMMARY OF PROVISIONS:

Section One - amends paragraph 2 of subsection (a) of section 801 of the tax law, as amended by section 1 of part N of chapter 59 of the laws of 2012 to state that for individuals with net earnings that are attributable to the MCTD from self-employment of individuals if such earnings attributable to the MCTD exceed two hundred and fifty thousand dollars for the tax year, the tax is imposed at a rate of (A) eleven hundredths (.11) percent of the net earnings from self-employment if such earnings attributable to the MCTD are greater than two hundred and fifty thousand dollars but do not exceed three hundred thousand dollars in any tax year, (B) twenty-three hundredths (.23) percent of the net earnings from self-employment if such earnings attributable to the MCTD are greater than three hundred thousand dollars but do not exceed three hundred and fifty thousand dollars in any tax year, and (C) thirty-four hundredths (.34) percent of the net earnings from self-employment if such earnings attributable to the MCTD are greater than three hundred and fifty thousand dollars in any tax year.

Section Two - states this act shall take effect on the first of July next succeeding the date on which it shall have become law.

JUSTIFICATION:

In 2011, the metropolitan commuter transportation tax was repealed for approximately 289,000 businesses with annual payrolls below $1.25 million. More than 6,000 businesses with payrolls between $1.25 and $1.75 had their payroll tax cut by as much as two-thirds.

Under the current law, self-employed individuals who earn over $50,000 a year are still paying the metropolitan commuter transportation tax. This legislation will repeal the metropolitan commuter transportation tax for self-employed individuals who earn less than $250,000 annually.

This legislation will also reduce the amount that self-employed individuals who earn from $250,000 to $300,000 to .11 percent, and self employed individuals who earn from $300,000 to $350,000 to .23 percent.

LEGISLATIVE HISTORY:

06/20/12 - S.7165-A Passed Senate 06/17/13 - S.2648 Passed Senate

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

This act shall take effect on the first of July next succeeding the date on which it shall have become law.

Text

STATE OF NEW YORK
________________________________________________________________________
2648
2013-2014 Regular Sessions
IN SENATE
January 23, 2013
___________

Introduced by Sen. BALL -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to the metropolitan commuter
transportation mobility tax rates on earnings from self-employment
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 2 of subsection (a) of section 801 of the tax
law, as amended by section 1 of part N of chapter 59 of the laws of
2012, is amended to read as follows:
(2) For individuals[, the tax is imposed at a rate of thirty-four
hundredths (.34) percent of the] WITH net earnings THAT ARE ATTRIBUTABLE
TO THE MCTD from self-employment of individuals [that are attributable
to the MCTD] if such earnings attributable to the MCTD exceed TWO
HUNDRED fifty thousand dollars for the tax year, THE TAX IS IMPOSED AT A
RATE OF (A) ELEVEN HUNDREDTHS (.11) PERCENT OF THE NET EARNINGS FROM
SELF-EMPLOYMENT IF SUCH EARNINGS ATTRIBUTABLE TO THE MCTD ARE GREATER
THAN TWO HUNDRED FIFTY THOUSAND DOLLARS BUT DO NOT EXCEED THREE HUNDRED
THOUSAND DOLLARS IN ANY TAX YEAR, (B) TWENTY-THREE HUNDREDTHS (.23)
PERCENT OF THE NET EARNINGS FROM SELF-EMPLOYMENT IF SUCH EARNINGS
ATTRIBUTABLE TO THE MCTD ARE GREATER THAN THREE HUNDRED THOUSAND DOLLARS
BUT DO NOT EXCEED THREE HUNDRED FIFTY THOUSAND DOLLARS IN ANY TAX YEAR,
AND (C) THIRTY-FOUR HUNDREDTHS (.34) PERCENT OF THE NET EARNINGS FROM
SELF-EMPLOYMENT IF SUCH EARNINGS ATTRIBUTABLE TO THE MCTD ARE GREATER
THAN THREE HUNDRED FIFTY THOUSAND DOLLARS IN ANY TAX YEAR.
S 2. This act shall take effect on the first of July next succeeding
the date on which it shall have become a law.

EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07360-01-3

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